Opinion: Clients beware of Connaught suicide bids

Grant Prior 13 years ago

If a deal seems too good to be true then I’m afraid it is. As clients of Connaught could be finding out to their cost in the coming weeks.

The stricken maintenance firm is now in administration after its shares were suspended and the banks refused extra finance.

The collapse of such a high profile business is a disaster for staff. But clients will also suffer as they are forced to find new contractors.

Connaught’s demise has been caused by a whole host of factors. But chief among them is bidding too low to win work.

Suicide bidding is a blight on construction and clients have to play their part by refusing the obvious temptations to go with the lowest price.

It’s no use handing a contract over to a firm which has jeopardised its financial future by quoting too low and could go pop before the job is finished.

Talk of quality, value and partnering seems like a bygone age in the current fight for the smallest margin.

If firms are daft enough to bid for work they can’t make a return on then clients have to take the lead by going with a more sensible price which will at least see the job finished.

Clients – particularly in the public sector – should be named and shamed if they encourage contractors to bid recklessly by always going for the cheapest deal.

Connaught is one of the biggest names to get caught-up in suicide bidding. But the practice is rife at all levels across the country and can only end in more failures and half-finished contracts.

Alarm bells should have been ringing last year when Morrison Facilities Services went to court over Connaught’s “abnormally low” bid to win a maintenance contract from Norwich City Council.

Morrison was the incumbent contractor but lost out when its renewal bid of £23m was beaten by a price of £17.5m from Connaught.

That’s a bid of more than 20% below Morrison’s price.

Norwich officials may have looked like they were saving cash. But that won’t be the case if they have to find a new contractor just months into the job.

The message is clear. Suicide bidding helps no-one in the long run.

It forces contractors under because no business can survive with a minimum margin strategy while clients run the risk of unfinished work and hunting for replacement firms.

Latest news

Willmott Dixon set for Manchester science park job

Contractor understood to be in final stages of talks to land £75m Greenheys building
2 days ago

Stewart Milne went down owing supply chain £153m

So far 1,375 firms have come forward with unpaid bills
2 days ago

Didcot disaster investigation enters its ninth year

Still no answers for families of quartet killed in demolition collapse
2 days ago

Mount Anvil wins £275m Westminster estate renewal

First phase of Church Street area regeneration will deliver 400 new homes and a library
2 days ago

Trio of A47 road upgrades to go-ahead as legal challenge fails

20-month delay adds tens of millions to dualling costs
2 days ago

Skanska and Morgan Sindall win £277m duo of Cambridge jobs

Railpen awards £200m Botanic Place and £77m Devonshire Gardens office jobs
3 days ago

Offsite specialist Merit sees profits grow

Contractor sees further growth in turnover and profits
2 days ago

Morgan Sindall delivers another record year of profit

Revenue tops £4bn as pre-tax profit soars 70% to £144m
3 days ago

Galliford Try nets two pipelines and road job worth £98m

Firm wins £64m of Thames Water pipelines and Halifax road improvements
2 days ago

HS2 viaduct blunder over wonky concrete segments

Align JV now drilling out concrete joint as part of week-long remedial work
3 days ago

City of London hots up as 9m sq ft under construction

Investors return to City as "10 Cheesgraters" of floorspace under construction
3 days ago

Four arrested in £140m property fraud probe

Serious Fraud Office investigating collapse of property developer Signature Group
3 days ago

McLaren gets green light for 31-storey student tower

Revamp of historic Birmingham site will provide 759 student beds and 189 apartments
3 days ago

BT Tower to become hotel

New owner MCR Hotels to transform iconic building
3 days ago

Plans in for first phase of £1.7bn ID Manchester

Plan to reinvent 1960s Renold Building as a new innovation hub
3 days ago

London £3bn housing framework out to tender

SMEs allocated slots on London Construction Programme housing framework refresh
4 days ago

BAM wins first major RAAC school rebuild

Contractor seals £46m deal for St Leonards school in Durham
4 days ago

Failed strip out specialist owes £1.5m to supply chain

More than 100 subcontractors and suppliers left with unpaid bills by Type Ten Limited
4 days ago

Councils to turn screw on building owners over fire safety upgrades

Government tells councils to step up legal action against rogue building owners
4 days ago

Green light for £300m Fenland energy from waste scheme

Wisbech incinerator will generate 50MW from half a million tonnes of waste
4 days ago

Multiplex starts on 50-storey Thames tower

Developer green lights construction of latest phase of £3bn Bankside Yards scheme
5 days ago

McLaren lodges fresh Reading Broad Street Mall plan

Town centre scheme will deliver 600 homes in four towers
5 days ago

Beard bags £24.5m Bristol office revamp

Construction to start in April
4 days ago

SMEs star in £3.2bn social housing upkeep deal

Around 85% of Efficiency North's framework winners are local firms
5 days ago

Scottish NHS new building projects delayed for two years

Spending clampdown hits over a dozen planned projects
5 days ago

Balfour M25 workers hold strike ballot

Motorway maintenance crews unhappy with 3.4% pay rise offer
5 days ago

Rainsford Contracts acquires M&E specialist

Expanded contractor will have turnover of £45m
5 days ago

Statom expands with launch of Northern HQ

RC frames specialist now targeting jobs in Scotland and north of England
5 days ago

High Court dismisses Stonehenge tunnel challenge

Judge quashes legal challenge against Government consent for £1.7bn job
5 days ago

£1.5bn Teesside carbon capture scheme consented

Final investment decision expected this year for construction start
6 days ago

Contractor services